How IoT strategy improves the value chain


The Internet of Things (IoT) creates opportunities for innovation, value chain improvement, and transformation. We present some IoT use cases across a wide range of industries, helping CIOs identify what to look for and avoid wasting resources on low-value deployments. IoT is proliferating across industries, creating opportunities for those who are exploring it and risks for those who are not. IoT is becoming a competitive weapon in the market, as it allows to focus on internal improvements or strengths such as better asset management, or efficiency in the use of resources; or also on external improvements, such as a better customer experience, or increased revenue generation.

Recommendations for IoT use

  • Create, as soon as possible, a cross-functional IoT planning team that includes business, operational, and IT executives.
  • Expand your thinking about what’s possible with IoT by studying use cases outside your own industry.
  • Task the team to identify IoT use cases and their impact on organizational performance and customer experience and satisfaction, and create a Technology Strategy Map that measures the strategic impact of the use cases on your organization.

Use the IoT Technology Strategy Map to socialize IoT opportunities, get feedback, and develop alignment and support to move forward with the most promising use cases.


The Internet of Things (IoT) will create unprecedented opportunities and challenges. Gartner (2016) forecasts 21 billion connected things by 2020. Vertical industry-specific elements (i.e., applications developed or tailored to specific industries, such as retail, manufacturing and transportation) will almost triple in the same time period: from 1 billion in 2015 to 2.9 billion in 2020. Adoption will occur in all industrial sectors.

Figure 1. IoT endpoint forecast for 2020 (by sector)

Connected Stuff Cast. Source: Gartner (April 2016)

Examples of use cases could include automobile insurers accessing vehicle telematics data (classified in Figure 1 as “automotive”). [consumidor]” 3) or utilities integrated with customer thermostats (classified in Figure 1 as “home energy management”) to offer discounts or rebates to reduce energy consumption during peak demand periods when wholesale energy prices are high (also known as “demand response”). The survey also found that 29% of organizations have already implemented IoT. Another 14% are planning to implement IoT in 2016. This indicates that the technology will be firmly embedded in mainstream enterprise adoption by 2017. In addition, there will be a shift toward externally focused benefits in 2016. “Improving the customer experience” will be the most popular, fastest growing and most common benefit pursued. 4 Therefore, IoT is increasingly becoming a competitive weapon in the marketplace. This increases the risk of inaction, as competitors can outcompete organizations that fail to take action.

Internet of Things Opportunities and Challenges

The IoT will create unprecedented opportunities and challenges for every CIO in every industry. Three main things that have changed in recent years are the acceleration in the number and value of connected things.

  • The cost of connectivity and embedded technology is no longer a barrier to adoption. Broadband, Wi-Fi, Near Field Communication (NFC), Bluetooth and mobile networks are now ubiquitous. Support large volumes of IoT connectivity at minimal incremental cost.
  • The complexity and intelligence of IoT is evolving to support an increasingly wide range of use cases. For example, increasing levels of artificial intelligence are leading to the development of autonomous devices that are capable of making decisions on their own. These use cases can range from incremental improvements to existing processes to transformational changes using automation, location sensing, identification, and more.
  • The provision of information through sensors and the resulting data analytics opportunities and context shaping are transforming the way we see the world and ourselves. Data is inherent in the operations of things, which makes it a rich source of additional information. Through analytics, data collected from things can be turned into information. The information captured and distributed by IoT is a key source for new digital strategies.

It’s Critical, a matter of survival!

IoT is a critical element of digital business transformation. IoT can play a critical role in digital business, including as an enabler of product and service transformation. For example, some manufacturers are looking to transform their business model from selling equipment to charging for the use of equipment measured by embedded IoT. Other manufacturers are looking to IoT to automatically identify customers and their preferences using beacon technology (for areas such as banking and retail). CIOs must identify strategic fundamentals before implementing new use cases. Several benefits provide value to two primary groups: (1) the implementing organization ; and (2) the customers/patients/citizens the organization serves:

Organizational performance with IoT:

IoT implementations can positively impact organizational performance by increasing revenue and decreasing costs, or indirectly impact organizational performance by avoiding problems. This will occur through IoT that creates new value/revenue and new business models, improves operations, optimizes assets, conserves resources, engages and empowers employees, improves risk management, and/or strengthens security. Customer experience: IoT implementations can make delivery easier, faster and/or safer for customers. This will occur through IoT that improves services, increases engagement, strengthens security, and improves personal well-being. In some cases, automation can also help prevent human error. The focus of this analysis is to identify existing IoT use cases in industries, and then estimate and plot them on the Technology Strategy Map (see Figure 2). Using standardized criteria to evaluate the use cases allows comparing the potential benefits in a consistent way. The resulting value map can serve as an alignment tool that can help the organization focus on projects that have the greatest amount of potential. Want to know more…

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